CNBC’s Jim Cramer comes up with a list of 12 problems he believes when solved, could help the stock market tide over the recent slump it is experiencing. His piece of advice comes on Wednesday when all three stock indexes in the U.S. are in the red for September. Here are the 12 solutions by cramer:
The job market needs to be promising
Jim Cramer stated that the job market needs to provide us some good news. Although Cramer informs that the nonfarm payroll report is grim, he added that if we are unable to arrive at a big number in a couple of weeks, it can be concluded that the lack of expanded unemployment benefits is solving the problem of labor shortage.
Reading the inflation moderation signs
On reading the inflation moderation signs, CNBC’s Jim Cramer said:
“Any business that’s planning its budget for next year has to assume, for once, that maybe prices won’t keep rising because right now when you put pen to paper, they all do.”
Dealing with the chip shortage
According to Cramer, an increase in manufacturing capacity can help the industries deal with the shortage in semiconductors, which many sectors, especially the automobile sector, have to deal with.
Improving the supply chain
Cramer states that the supply chains depend broadly on market sentiment. He said:
“The rising cost of oil, the force majeure for paint ingredients, the endless wait for fixtures or washers or dryers; these shortages are freezing the economy. It needs to thaw if business is going to pick up.”
Corporate outlook must be positive
When it is time to declare the future financial results, Cramer is hopeful that corporate houses will have developed a positive outlook. Moreover, he hopes that organizations hint that they are seeking light at the end of the dark tunnel.
According to Cramer, opening schools can help the economy. But, not ruling out the risks of opening schools, he states that parents can return to work when schools are open.
A decline in hospitalization can spike the momentum in the market
According to Cramer, a drop in the number of people getting hospitalized due to the coronavirus can help the market gain momentum and witness a spike.
Motivate people to travel
There is a dip in the number of air travellers and those seeking accommodation in hotels. However, Cramer shares that an increase in air passengers and high hotel occupancy rates are positive signs for the economy.
Spike in bond yeilds
On bond yields, Cramer said:
“We want rising interest rates caused by a stronger economy, not inflation. Don’t fear higher rates; fear rates that rise when the economy’s not doing great.”
IPOs need to go slow
Cramer states that he wants to witness only high-quality companies entering the market. According to him, we do not need the kind of supply we are experiencing.
Stock buybacks must increase
In the backdrop of Microsoft announcing a $60 billion buyback and 11% dividend hike, Cramer said:
“More buybacks like Microsoft’s that clear up the excess stock supply and inspire confidence in corporate balance sheets.”
The focus must move away from Washington and Beijing
Stating that Washington and Beijing need to remain off the limelight, Cramer noted that scrutiny of businesses from regulators is a challenge to own companies in China. Meanwhile, in the U.S., policies, and taxes has an impact on the market.
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